SaaS churn rate: formula, calculator and 2026 benchmarks
What is the SaaS churn rate?
SaaS churn rate is the share of customers, or of recurring revenue, a company loses in a period: churn = customers lost ÷ customers at the start. Losing 10 of 400 customers in a month is 2.5% monthly churn, which compounds to about 26% a year. Revenue churn uses MRR instead of customer counts.
Key facts
- Churn compounds: "A monthly churn rate of 5% corresponds to an annual churn rate of 46%." (ChartMogul, 2022)
- In ChartMogul's data, companies with net revenue retention under 60% have a median customer churn of 7.3%, more than four times the 1.7% of those at 100% or more. (ChartMogul, 2026)
- Lighter Capital's 155 private B2B SaaS startups had a median annual customer churn of 16.25% and revenue churn of 12.50%. (Lighter Capital, 2025)
- Benchmarkit's median company kept 84% of its revenue in 2025: "companies lose 16% of their existing ARR annually to churn and contraction". (Benchmarkit, 2026)
- David Skok's red line: "If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business." (Skok, 2013)
SaaS churn rate calculator
Enter one month's customer counts and MRR. Count only customers who were paying at the start of the month, and include downgrades in lost MRR for gross revenue churn.
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How to calculate churn rate
Churn rate = Customers lost in the period ÷ Customers at the start of the period
In words: divide the customers who left during the period by the customers you had at its start.
- Customers lost: Paying customers who cancelled during the period. ChartMogul leaves out customers who joined and left, or left and came back, in the same period.
- Customers at the start: Paying customers on the first day of the period. New customers who joined during it aren't in the denominator.
- Revenue churn: (Churned MRR + contraction MRR) ÷ MRR at the start of the period. ChartMogul calls this the gross MRR churn rate.
- Annual churn: 1 − (1 − monthly churn)^12. Multiplying by 12 overstates it: 2% a month is about 22% a year, not 24%.
Worked example
An illustrative company starts the month with 400 customers and $80,000 of MRR. Ten customers cancel, and cancellations plus downgrades take $1,600 of MRR. The results below are computed by the calculator's tested code.
| Input | Value |
|---|---|
| Customers at the start of the month | 400 |
| Customers lost during the month | 10 |
| MRR at the start of the month | $80,000 |
| MRR lost to churn and downgrades | $1,600 |
Monthly logo churn: 2.5% Annualized logo churn: 26.2%Monthly gross revenue churn: 2.0%Implied average customer lifetime: 40.0 months
Annual churn = 1 − (1 − 2.5%)^12 = 26.2%
Logo churn of 2.5% a month sounds small but compounds to 26.2% a year: about a quarter of customers gone. Revenue churn is lower, 2.0% a month, because the customers who left were smaller than average. That 2.0% is gross; Skok's 2% warning line is for net revenue churn, so expansion would need to offset part of it (our reading).
In a spreadsheet
- Monthly logo churn, with customers lost in B2 and customers at the start in C2: =B2/C2
- Annual churn from a monthly rate in D2: =1-(1-D2)^12
- Gross revenue churn, with churned plus contraction MRR in B3 and starting MRR in C3: =B3/C3
- Implied average customer lifetime in months, from monthly churn in D2: =1/D2
How founders and investors read churn
If you're the founder
- Churn sets a ceiling on size. Skok: "the churn rate, combined with the rate of new ARR adds, not only defines how fast you can grow the business, it also defines the maximum size the business can reach".
- Track customer and revenue churn separately. Skok's example: 10% customer churn can be only 3.4% revenue churn if the customers lost were small, and the reverse is just as possible.
- Early on, act on it rather than benchmark it. Lemkin: NRR and churn "aren't necessarily statistical significant before Year 2-3 and before $1m-$2m in ARR".
Questions you'll be asked
- Is that logo churn or revenue churn, and gross or net?
- Monthly or annual, and how did you annualize it?
- Are annual-plan customers counted only when they're up for renewal?
- Which customer segments churn most, and why?
If you're the investor or LP
- Ask for the definition before the number. Janz: "Since there is no official US-GAAP definition of churn or retention, different companies use different ways to measure and report these metrics."
- Read churn with expansion. Net revenue retention above 100% means expansion outweighs churn: Skok's "Negative Churn".
- Watch for "tourist" customers. Jamin Ball: "When buyers are engaging because 'everyone is doing it' (AI, LLMs, etc.), they often don't have a long-term plan." (Clouded Judgement, 2025)
Questions to ask the company
- Can we see churn by monthly cohort for the last two years?
- How do churn and contraction split by segment and price point?
- What share of churn comes from customers in their first 90 days?
- What is gross revenue retention over the same period?
What is a good SaaS churn rate?
It depends on price point and customer size. In ChartMogul's data, median customer churn runs from 1.7% for companies with net revenue retention of 100% or more to 7.3% for those under 60%. Small private B2B startups lose about 16% of customers and 12.5% of revenue a year at the median.
Show the numbers
| Net revenue retention band | Median | 25th percentile (best quarter) |
|---|---|---|
| NRR under 60% | 7.3% | 5.5% |
| NRR 60–80% | 4.3% | 3.1% |
| NRR 80–100% | 2.3% | 1.5% |
| NRR 100% or more | 1.7% | 0.9% |
Benchmarks
| Segment | Measure | Typical | Top quartile | As of | Sample | Source |
|---|---|---|---|---|---|---|
| Customer (logo) churn · For churn lower is better, so the "top quartile" column shows the 25th percentile. | ||||||
| Private B2B SaaS startups | Annual customer churn | 16.25% (75th percentile 27.25%) | 9.35% | CY 2020–2024 | 155 startups (Lighter Capital) | Lighter Capital, 2025 |
| ChartMogul customers, by growth rate | Median customer churn | 3.1–3.5% for growth of 0–100%; 5.2% when shrinking; 5.3% above 100% growth | — | 2026 | Not stated (ChartMogul) | ChartMogul, 2026 |
| Revenue churn | ||||||
| Private B2B SaaS startups | Annual revenue churn | 12.50% (75th percentile 24.53%) | 5.48% | CY 2020–2024 | 155 startups (Lighter Capital) | Lighter Capital, 2025 |
| B2B SaaS and AI-native | Gross revenue churn (1 − GRR) | 16% a year (GRR 84%) | — | CY 2025 | 226 companies (Benchmarkit) | Benchmarkit, 2026 |
| Private B2B SaaS | Gross revenue churn (1 − GRR) | 9% a year (GRR 91%) | — | 2025 | More than 1,000 companies (SaaS Capital) | SaaS Capital, 2025 |
| AI-native products under $50 a month | Gross revenue retention | 23% (77% lost in a year; our arithmetic) | — | 2025 | ChartMogul customers (via Kyle Poyar) | Poyar, 2025 |
| Zoom Online customers | Average monthly revenue churn | 2.9% | — | Q2 FY27 | Company release | Zoom, 2026 |
| Rules of thumb | ||||||
| SaaS companies (Skok) | Net revenue churn warning line | Above 2% a month | — | Jan 2013 | VC rule of thumb | Skok, 2013 |
| SaaS startups (Janz) | Target | Net MRR churn of zero or below | — | Feb 2015 | VC rule of thumb | Janz, 2015 |
Churn is U-shaped against growth. ChartMogul: "Median churn is highest at both extremes, 5.2% for companies with negative annual growth and 5.3% for companies growing over 100% a year".
Price point matters. Poyar: "AI-native products that sell for <$50 per month see just 23% GRR and 32% NRR. This is 20 points worse than either B2B or B2C SaaS."
Compiled Oct 2, 2026. Next review: September 2027, after SaaS Capital's 2027 retention brief. Left out: ChartMogul's 2022 churn by ARPA band (More than four years old; cited in the history instead); Second-hand quotes on seat cuts at renewal (Couldn't be checked against the original earnings-call transcript). Download these benchmarks as CSV.
Churn in the wild: how Zoom reports it
One of the few public software companies that still reports a churn rate for small customers. Its method, step by step, from its Q2 FY2027 release. (Zoom, 2026)
| Step | Zoom's choice | Why it matters |
|---|---|---|
| Who | Online customers only | Enterprise customers are measured by net dollar expansion instead |
| Starting point | "Entry MRR" at the start of the quarter | Customers added during the quarter don't dilute the rate |
| What counts as churn | MRR of customers who "canceled or downgraded their subscription or notified us of that intention" | Churn is counted at notice, not at the end of the subscription |
| From quarter to month | Quarterly churn "divides that amount by three" | Simple division, not compounding, which reads slightly lower than the equivalent compounded monthly rate |
| Result | "Online average monthly churn was 2.9%, consistent with the same quarter last fiscal year." | About 30% a year if compounded (our arithmetic) |
Zoom counts revenue churn, including downgrades, at the moment a customer says it will leave. That's stricter than waiting for the subscription to end, and it's why public companies' churn figures need their definitions alongside.
Zoom's own description, as filed in its 8-K. The SEC filing was read from an archived copy because sec.gov blocks automated access; the link goes to EDGAR.
Churn rate vs GRR, NRR, quick ratio and customer lifetime
| Metric | Answers | Ignores | Use it when | It misleads when |
|---|---|---|---|---|
| Logo churn | Share of customers lost | How much each customer paid | Judging product fit across many small customers | Customers vary widely in size |
| Gross revenue churn | Share of recurring revenue lost to cancellations and downgrades | Expansion from customers who stay | Isolating what leaks out | Annual plans are mixed into a monthly rate |
| Gross revenue retention | Share of revenue kept, before expansion | New and expansion revenue | Comparing with published benchmarks | Read without growth |
| Net revenue retention | Revenue kept including expansion | New customers | Judging whether existing customers grow | A few big upsells hide broad churn |
| SaaS quick ratio | Revenue added per $1 lost | What the growth cost | Checking the quality of growth | The revenue base is tiny |
Gross revenue churn ≈ 1 − GRR and net revenue churn ≈ 1 − NRR, so NRR above 100% means negative net churn. Annual churn = 1 − (1 − monthly churn)^12, and average customer lifetime ≈ 1 ÷ monthly churn.
Common mistakes: how churn gets understated
- Multiplying monthly churn by 12. Churn compounds on a shrinking base. Skok: "At 2% monthly churn, you are losing about 22% of your revenue every year", not 24%.
- Mixing annual plans into monthly churn. Janz: "By including customers on annual plans who aren't up for renewal in the period you're measuring you're underestimating your true churn rate."
- Adding new customers to the denominator. Counting customers who joined during the period makes churn look lower. Use customers at the start.
- Reporting only one kind of churn. Logo churn hides the loss of a big account; revenue churn hides many small losses. Report both.
- Compounding a noisy month. SaaS Capital's Randall Lucas warns that compounding monthly figures exaggerates: 98% monthly NRR "works out to 78.5% annual NRR". Compare each month with the same month a year earlier instead.
- Benchmarking too early. With a few dozen customers, one cancellation moves the rate by points. Below roughly $1M–$2M of ARR, trends matter more than benchmarks.
Where churn metrics came from and how they're regarded today
| When | What happened | Source |
|---|---|---|
| Jun 2026 | Benchmarkit's median gross revenue retention falls from 88% to 84%: "companies lose 16% of their existing ARR annually to churn and contraction". | Benchmarkit, 2026 |
| Mar 2026 | Tomasz Tunguz on bottom-quartile public software: "With 96% NDR, they lose 4% of existing revenue annually." | Tunguz, 2026 |
| Dec 2025 | Kyle Poyar's "AI churn wave" finds AI-native companies' median gross revenue retention rising from 27% in January to 40% in September. | Poyar, 2025 |
| Sep 2025 | Lighter Capital reports median annual revenue churn up from 11.34% to 12.50% across its startup portfolio. | Lighter Capital, 2025 |
| Apr 2025 | SaaS Capital warns that compounding monthly retention distorts the annual figure. | SaaS Capital, Apr 2025 |
| Feb 2022 | ChartMogul: median monthly customer churn runs from 6.1% for accounts paying under $25 a month to 2.2% above $500. | ChartMogul, 2022 |
| Dec 2017 | Christoph Janz surveys how public SaaS companies report churn and finds no common definition. | Janz, 2017 |
| Feb 2015 | Janz argues startups should aim for negative MRR churn. | Janz, 2015 |
| Jan 2013 | David Skok sets 2% a month of net revenue churn as the warning line. | Skok, 2013 |
| May 2012 | Skok coins "Negative Churn", when expansion revenue exceeds the revenue lost. | Skok, 2012 |
How it's regarded today
- Churn is rising. Benchmarkit's median company lost 16% of its revenue to churn and contraction in 2025, up from 12% the year before.
- The AI churn wave. Cheap AI products churn fastest, though retention improved through 2025. Poyar: "I suspect many of the early AI tourists left; those who remain are more committed or shifting from experimentation to production."
- Retention metrics over raw churn. Most public companies now report gross or net revenue retention rather than churn; Zoom is an exception (Zoom, 2026).
- Customer churn rate (ChartMogul, 2026). Customer churn by net revenue retention band and growth rate, and the formula that excludes joined-and-churned customers.
- 2025 B2B SaaS Startup Benchmarks (Lighter Capital, 2025). Annual customer and revenue churn percentiles for 155 private startups, from connected business data.
- SaaS Metrics 2.0 - A Guide to Measuring and Improving what Matters (Skok, 2013). Why customer and revenue churn diverge, and how churn caps a company's size.
What experts say about churn
“I suspect many of the early AI tourists left; those who remain are more committed or shifting from experimentation to production.”
“Churn is important, but in the early days, just drive it down. You are still learning.”
“I'm not saying that it's impossible, but I believe the much more likely path to a SaaS unicorn is by getting MRR churn to zero or below”
“If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business.”
SaaS churn rate FAQ
What is the SaaS churn rate?
The share of customers (logo churn) or recurring revenue (revenue churn) a subscription business loses over a period, usually a month or a year.
How do you calculate churn rate?
Divide customers lost during the period by customers at its start. 10 lost out of 400 is 2.5% monthly churn. For revenue churn, divide churned and downgraded MRR by starting MRR.
What is a good churn rate for SaaS?
It depends on price and customer size. Companies with strong net retention see under 2% monthly customer churn in ChartMogul's data; small private startups lose about 16% of customers a year at the median.
How do I convert monthly churn to annual churn?
Compound it: annual churn = 1 − (1 − monthly churn)^12. 2% a month is about 22% a year, and 5% a month is about 46%.
What is the difference between logo churn and revenue churn?
Logo churn counts customers; revenue churn counts dollars. Losing many small customers raises logo churn more; losing one big customer raises revenue churn more.
What is negative churn?
When expansion revenue from existing customers exceeds the revenue lost to cancellations and downgrades, so net revenue churn is below zero and net revenue retention is above 100%.
Is churn the same as 1 minus retention?
For revenue, roughly: gross revenue churn ≈ 1 − gross revenue retention. For customers, logo churn = 1 − logo retention over the same period.
Related metrics and guides
Sources
Every link was opened and checked. Archived copies guard against links that move or disappear.
Primary data
- 2025 B2B SaaS Startup Benchmarks. Lighter Capital, 10 Sep 2025. Lender's portfolio data, 155 startups, CY2020–2024 pooled.
- 2026 SaaS and AI Metrics Benchmarks. Benchmarkit, 1 Jun 2026. Sponsored report. Archived copy
- 2025 B2B SaaS Retention Benchmarks (Research Brief 32). SaaS Capital, Sep 2025. Lender's survey; no archived copy found.
- Customer churn rate. ChartMogul (SaaS metrics library), Updated 8 Sep 2026. Analytics vendor's customer data; period, sample and date not stated. Archived copy
- What Is a Good Customer Churn Rate?. ChartMogul, 23 Feb 2022. Analytics vendor's customer data. Archived copy
- Zoom Communications Reports Financial Results for the Second Quarter of Fiscal Year 2027. Zoom (8-K exhibit 99.1), 25 Aug 2026. Read from the archived copy; sec.gov blocks automated access. Archived copy
Practitioner
- The AI churn wave?. Kyle Poyar (Growth Unhinged), 10 Dec 2025. Newsletter drawing on ChartMogul data. Archived copy
- The Sword of Damocles in Software. Tomasz Tunguz, 7 Mar 2026. Author's analysis of public filings. Archived copy
- GRRumbling About Retention Metrics, or, Pitfalls in Measuring SaaS Churn. Randall Lucas (SaaS Capital), 8 Apr 2025. Archived copy
- Dear SaaStr: What Are the Most Important SaaS Metrics in the Early Days?. Jason Lemkin (SaaStr), 12 Nov 2024 (first published 2019). The "just drive it down" passage was added in the November 2024 update; the archived copy predates it. Archived copy
- Clouded Judgement 6.6.25 - How to Spot ERR. Jamin Ball (Altimeter), 6 Jun 2025. Newsletter. Archived copy
- Calculating subscriber churn rate in Billing. Stripe (support article), Updated 2 Sep 2026. Archived copy
- How public SaaS companies report churn, and what you can learn from them. Christoph Janz (The Angel VC), Dec 2017. Archived copy
- Why (most) SaaS startups should aim for negative MRR churn. Christoph Janz (The Angel VC), 22 Feb 2015. Archived copy
- SaaS Metrics 2.0 - A Guide to Measuring and Improving what Matters. David Skok (For Entrepreneurs), 16 Jan 2013. Archived copy
- Unlocking the Path to Negative Churn. David Skok (For Entrepreneurs), 7 May 2012. Archived copy
Changes to this page
- · Major · Page published. Benchmarks compiled 2 October 2026.
Cite this page
Dominique Bouillet, "SaaS churn rate: formula, calculator and 2026 benchmarks", CX Cash, updated Oct 26, 2026, https://cxcash.com/metrics/saas-churn-rate
CX Cash builds software for founders and investors. This page is education, not investment advice. Third-party figures link to their source, and our own arithmetic and illustrative examples are labelled as such.